Thought bubble: Ohio's $600 million for Browns stadium
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Illustration: Aïda Amer/Axios
👋 Sam here, offering some context on the money the state of Ohio may allocate to the proposed Browns stadium in Brook Park.
State of play: House Republicans passed the biennial state budget last week, which included $600 million in state-backed bonds for the Haslams' project.
- The Senate and Gov. Mike DeWine must also approve before it's formally adopted.
Friction point: Paying back those bonds could cost Ohio taxpayers nearly $1 billion, once interest is included, according to DeWine.
- That money will not be repaid by the Browns in the same way that you or I repay a loan.
What they're saying: The team argues the stadium and surrounding new development will generate sufficient tax revenue to pay back the debt over the next 25 years.
By the numbers: The Browns have agreed to pay $38 million up front in what they're characterizing as "prepaid rent" to alleviate state risk. (Lawmakers amended that figure to $50 million.)
- But other than that, the team itself is not paying off the bonds at all. Revenue from parking taxes, admissions taxes, and income taxes will be used.
Between the lines: History tells us that the economic projections of pro teams tend to be overstated to justify public subsidies. Remember when Gateway initially promised 28,000 jobs?
- Between 1989 and 1996, the entire central business district only grew by 6,300 jobs, including the menial, low-wage jobs the stadiums created.
- The state's foremost stadium financing expert, Ken Silliman, believes the Browns revenue projections are "way too optimistic."
Plus: Economists have published studies for years showing that pro stadiums are great at shifting economic activity, but not at creating new spending.
In other words: Even if the Browns' projections are accurate, it would likely come at the expense of the rest of the region — leeching spending (and tax revenue) from other places where we already spend our money.
The latest: An amendment to disallow state funding of infrastructure around pro sports stadiums failed by a single vote.